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June 29 — Deutsche Bank Securities Inc. has agreed to pay a record $6 million to resolve Financial Industry Regulatory Authority allegations it didn't provide accurate “blue sheet” trade data to regulatory authorities in an automated, timely format.
The fine, announced June 29, is FINRA's highest for blue sheet inaccuracies. FINRA has been cracking down on discrepancies in blue sheets, which are used by regulators to conduct market surveillance and for complex investigations. In December, Macquarie Capital Inc. settled allegations over its blue-sheet practices for $2.95 million (247 SLD, 12/28/15). A U.S. subsidiary of Credit Suisse Group AG also paid $4.25 million in September to settle similar allegations (188 SLD, 9/29/15). Likewise, Investment adviser Oz Management LP shelled out $4.25 million in July for inaccurate trade data submissions (135 SLD, 7/15/15).
In blue sheet requests, the Securities and Exchange Commission and FINRA ask brokers, market makers and clearinghouses to provide details of trades routed through them. Federal securities laws and FINRA rules require firms to provide this information electronically upon request.
According to FINRA, from 2008-2015, Deutsche Bank's systems for answering blue sheet requests failed to meet regulatory reporting requirements. As a result, the firm submitted about 3,533 blue sheets to regulators that misreported or omitted critical information on at least 1,077,706 million trades, FINRA said.
The self-regulatory organization also found that many of Deutsche Bank's blue sheet submissions didn't meet the 10 business day regulatory deadline.
Deutsche Bank was represented by Thomas J. McGonigle of Murphy & McGonigle P.C., Washington.
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To view the Deutsche settlement, visit: http://www.finra.org/sites/default/files/Deutsche_AWC_062916.pdf?ampi_source=MM&i_medium=email&i_campaign=NewsRelease%5F062916%5FFINAL.
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